Troy Senik: State competition creating a 'Blue Diaspora'

For all the beatings that the free market has taken in recent years, there's at least one area where competition is alive and well: between the 50 states. Under the 10th Amendment to the Constitution, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

And while the thrust of American law has been to narrow state power as federal influence has expanded over the years, enough sovereignty remains at the state level to create substantial differences between jurisdictions.

This arrangement has always allowed a measure of diversity in American policymaking. As Supreme Court Justice Louis Brandeis famously noted, "a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country." And experiment they are.

What makes the idea of states as "laboratories of democracy" even more salient than when Brandeis wrote his opinion more than 80 years ago is the fact that moving to the laboratory of your choice has never been so easy. Modern transportation makes a cross-country relocation a matter of relatively slight inconvenience. The growing acceptance of telecommuting in an age where a smartphone and a laptop can replicate an office virtually anywhere are increasingly severing the ties between where we work and where we live. As choosing a home becomes progressively more a matter of personal taste than professional exigency, culture matters. So too does culture's tributary, politics.

At a time of political polarization, the choice between living in a red or blue state is virtually a matter of choosing citizenship in separate nations. If you're in search of low taxes, light regulations, the ability to own a gun with minimal hassle, and an absence of nanny state meddling, go red, young man. If you're charmed by progressive taxation, a strong union influence, pervasive environmentalism, and public sector obesity, blue's for you. Unsurprisingly, the results of this experiment are lopsided. Look at the states leading the nation in net domestic outmigration and you'll see liberalism's starting lineup: Illinois, New York, Michigan, and, of course, California. Among those reaping the most new inhabitants are Texas, Florida, North Carolina, Georgia, and Arizona.

It turns about that the ability to pursue opportunity – which is best realized through a relatively unencumbered free market – is a population magnet. That's the reason why the five states CEO magazine ranked as having the best business environment in the nation (Texas, Florida, North Carolina, Tennessee and Indiana) are all cleaning up, while the bottom five (Michigan, Massachusetts, Illinois, New York and California) are all atrophying.

While the trend lines are unmistakable on the decline of blue state America, it's likely a mistake to count them out just yet. No matter how high the cost of living climbs, how oppressive the economic climate, or how daunting the pension shortfalls, places like New York and California will never entirely lose their appeal as long as they remain cultural epicenters for the nation (and, in California's case, home to some of the nation's best weather and most charming aesthetics – the Golden State is literally living off of its looks these days).

That's an abstract calculation, however, the appeal of which is limited to those who don't live paycheck to paycheck. For all of the talk about high taxes driving out millionaires, it's worth noting that the real cost comes in terms of the working class. As Alyssia Finley recently noted in the Wall Street Journal, "...[M]ost of California's outward-bound migrants are low- to middle-income, with relatively little education ... Their median household income is about $40,000 – two-thirds of the statewide median – and about 95 percent earn less than $80,000."

As this sector of the population – those whose calculations on where to live stem from such pedestrian matters as finding a job, owning a home, and raising a family – increasingly join the blue state diaspora, their former home states will increasingly be populated only by the wealthy and the very poor; by those who own mansions and those who clean them. Whether such an arrangement is feasible in the long term is a question that blue state America should be asking itself before it becomes inevitable.

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